Hi, this is Wayne again with a topic “Netflix’s plan for world domination — CES 2016 interview”.
Hey, it’s been popper from the verge, I’m here at CES with Ted sir and O’s chief content officer from Netflix. They made some big news today when they announced they were going global, adding 130 new countries and we’re gon na chat a little bit about what makes a great show and what makes a show go global. Tell us a little bit about who you are and what you announce today. I’M Ted Saran doz, I’m the chief content officer for Netflix and today, Netflix went live in 130 additional countries, making Netflix practically global, I say practically cuz doesn’t doesn’t include China yet, but we’re getting there, and so how much bigger is that than you were before? Is that twice as big well? Geography? It’S a lot! Bigger broadband house knows much better.
It’S it’s! It’S an enormous leap forward for sure, and so the countries that you’re in the people who are watching Netflix are they gon na get pretty much the same experience that I would in the US is it gon na vary by territory, unfortunately, because where we sit today With this kind of patchwork of availability because of existing deals and old contracts and those kind of things, there’s a patchwork of availability around the world, so Netflix today is different from one country to the next, and what we’re working for every year is that it becomes Less and less fragmented and more global, so all of our original series as an example, we released globally at the same moment, I’ll more and more of our licensing dollars. That say about 80 to 85 percent of our new licensing dollars are spent globally being buying content for the four that we work, where we have global rights and lined up Windows. But it’s gon na be take several years to do it, but every year think about it as less and less fragmented.
And so a lot of the shows that you produce are set in different parts of the world. Is the idea that you’re going to begin producing content locally in all these different countries and trying to figure out what would work on a global level and then making those shows sort of you know the Netflix 10 pulse yeah there’s a version of that happening today, Where, like a show like narcos narcos, I think is probably the purest vision for global television we’ve seen yet, and I say that because we produce it with a French film company, the oldest friend, you know film production company in France, it’s shot in Colombia, it was Created by Brazilian stars, a Brazilian who speaks Spanish, the shows about 85 % in Spanish and people love in Germany. So I mean it’s a real global show in almost every aspect of the creation, the production and its consumption as well. We are also doing shows that are more locally focused, but we think we’ll find a large global audience for like Club de Cuervos is a show that about a soccer team. We film in Mexico, in Spanish, most of the watching of that is in Spanish and in Latin America, but we do find us. Latino market loves the show as well, and it’s that’s getting bigger, we’re filming a show in France right now called Marseille with Gerard Depardieu. In French, it will be a great piece of French original programming that people will watch on Netflix around the world. I’Ve heard you talked before about how house of cards is really popular in China, and I know that’s a major market.
You guys want to move into when you say it’s really popular in China. Is that people pirating it or getting it through a VPN who’s watching it in China and how are they watching it so house of cards? The rights for out for house of cards outside of Netflix are controlled by Sony and they sell them off to other Espada and TV suppliers in China. So it’s through legitimate channels, ittsan watched an enormous volume in China, so you know that the content would work there. What are the obstacles? What are the roadblocks to actually getting Netflix into China? Think it’s a good example of the exciting opportunity for global television, which is you wouldn’t think much about house of cards as Chinese? We see things like you know, since sense8 is a show.
That’S kind of architected to be a global show as filmed in 8 different cities in the state, at the same time, with local talent in those cities with a big global filmmaker. You know the Wachowski is creating the show, but, what’s been really exciting, is to see things that are not necessarily engineered to be global. That just organically are global. We license shows like suits, is a show that you pull off the USA Network that becomes incredibly popular everywhere. We operate everywhere. We launch, one of the top watch shows in that country.
Is prison, break the old prison. The old Fox show so there’s a lot of shows that are unintentionally global, but wildly global, which says that they are speaking. You know to the soul, they’re speaking to the human condition, not regional, biases or regional preferences right and because you guys are freed up as sort of you know it you’re distributed over the Internet, and now you have this big global footprint in some ways.
Are you now acting more as the middleman? The distributor suits is a good example. You had nothing to do with its creation, but you’re bringing it to these big new audiences. Better call Saul is another example that, where Sony creates that show it premieres on AMC network in the North America and in most countries in the United States, it premieres as a Netflix original show where yet we didn’t produce it.
But our licensing dollars enable the show to be produced at such a high caliber, and so in all these new countries. Are you gon na be able to do the same stuff? You do here at the same price like in countries with you, know, different economics with different levels of broadband. How are you gon na sell Netflix and how people gon na access it? Well we’re gon na start off there right, so our Netflix is price.
You know with near parity, I’ll or all around the world today in our existing 60 countries that we were operating prior to this morning and I think that’ll be the case for a while. While we kind of figure out the market in the market conditions – and so are there technologies that you’re looking at you know we’re here at CES, things like virtual reality or you know, live streaming is becoming increasingly popular. Are there opportunities? Are we live streaming now? We are live streaming that so don’t you feel are there opportunities for you to do things that are yeah a little bit different than sort of you know the traditional format of here’s a show.
You can watch it episodically, here’s, the film, you can watch it in one sitting. Yeah, you know, um VR is an example. I think there’s one thing that I don’t know yet how it will emerge as a part of narrative, storytelling, it’s fun and there’s a lot that will come over the next couple of years with it. So we’re not trying not to get too far ahead of the platform itself so that people will be able to watch whatever we’re producing for it.
So you can watch Netflix, movies and TV shows with VR goggles and have that experience. But in terms of incorporating into our production, just on pure, very, very edge case experiments on right now and we produced as an example over the holiday, we released an episode of Marco Polo called hundred eyes. There was an origin story of one of the main characters of Marco Polo that we just dropped it just one day. Jokes is on the site and with no hype and no fanfare and a way to bridge season.
One in season two. We did the same with the Bojack horseman, but Christmas episode last year and we are experimenting with different forms inside and outside of the series themselves. Chelsea Handler will be our first talk show, which is a new format for us. Making a murderer right now is kind of a unbelievable sensation yeah and it’s it’s our only our second documentary series that we launched and it is in talk about like in the zeitgeist. I mean that’s what everyone’s talking about these days right and so that’s a good example. Is that something that was data-driven.
You saw people watching a lot of true crime. They were watching a lot of murder, mysteries and you said hey. We know that our audience will like this. Let’S make this documentary, or are you making more decisions now based on yeah your gut? What seems like good, creative? You know the meetings that you take.
It’S a little bit of both. I mean I really look at it as informed hunches, so you might have you have a hunch and you either use the data to either confirm the hunch or dismiss the hunch or the other way around, which is you start seeing patterns in the data? Adam Sandler was an example of that where I was looking through these you know reports around the country or around the world, I’m seeing that Adam Sandler movies in every window were performing fantastic everywhere in the world and in some countries, Adams, movies, weren’t even being released And what we saw was no there’s a huge demand for Adam Sandler movies and sooo much so much so that we invested in the first window for his next four movies and and he’s in the first one. Ridiculous six proved to be enormous, ly global and a real, huge success on Netflix already only in three weeks as you look out, you know into the the future. Today was a big announcement. You know you’ve made a big change. Do you see this doubling the subscriber base? I mean you’re in so many more markets now.
Could this you know really help you change your scale. Remember all these countries are at different states of developing in terms of broadband speeds, payment infrastructure, all those things that you need to be a really happy Netflix subscriber. So the potential of the market is is huge, so for Facebook and YouTube and a lot of it and most internet companies, it’s 80/20 international.
You know only 20 % of their business is domestic, and I think that represents what the map could look like in terms of most web-based companies now we’re. You know if we do a really great job at programming the site in a way that people are excited about the programming all over the world, either. Look at the global penetration of mobile phones and broadband, and you say that’s the markets at potential. So right now the audience is larger in the US and you’re saying you think internationally that market could grow to be much larger than the u.s.. Currently, I’m sure that would be a natural progression of the business. I think very cool .